Wednesday, 30 August 2017

Asian stocks mixed as UNSC condemns Pyongyang’s missile launch

Asian markets were mixed in early trading hours, with market participants still digesting a statement from the United Nations Security Council calling Pyongyang to stop missile launches, but without imposing any new measures to respond for its previous violation.

Australia ASX+2.10+0.04%5,735.7005:10 GMT - OPEN

Shanghai Composite Index+3.33+0.10%3,368.5505:10 GMT - OPEN

Hang Seng Index+242.82+0.87%28,007.8305:10 GMT - OPEN

Nikkei 225+156.47+0.81%19,519.0205:10 GMT - OPEN

TSEC 50 Index+60.11+0.57%10,556.6805:10 GMT - OPEN

Yesterday, Asian equity indexes fell sharply in the light of a new missile launch by North Korea. The projectile flew over Japan, rising geopolitical tensions in the region.

The missile was in the air for about fifteen minutes before breaking in pieces and falling into the Pacific ocean. Tuesday’s launch marked fourteenth of this year.

In reaction to this act of provocation, Japanese Prime Minister Shinzo Abe called for an emergency meeting of the United Nations Security Council.

Late on Tuesday, members of council agreed on a statement that strongly condemns North Korea’s recent firing of a missile that flew over Japan, calling it an “outrageous” threat for peace in the region and urging Pyongyang to halt its ballistic and nuclear programs.

"The Security Council expresses its grave concern that the DPRK is, by conducting such a launch over Japan as well as its recent actions and public statements, deliberately undermining regional peace and stability."

Gold prices retreated in the light of such statement, as market players felt more confident about the situation and less worried about a potential near-term escalation. The yellow metal rose to a 10-month high at $1,322 a troy ounce as investors moved their money into safe-havens in search for shelter over uncertainty.

The yen was another star of the previous session, moving upwards despite the increasing tension between Tokyo and Pyongyang.

In economic news, US consumer confidence for August outperformed expectations at 122.9 vs an estimated reading of 120.3. Japan’s retail sales rose 1.9 percent in July, above an expected increase of 1.0 percent, but still down from a previous 2.1 percent growth rate.